Business: Air-India

NO FLIGHT OF FANCY

With its proposed merger with Indian in the wings, the Maharajah is on a king-sized growth trajectory

EMPIRE FEATURE

Vasudevan Thulasidas’ hopes have taken wings. A little over a year ago, he was battling unions and trying to keep afloat state-owned airline Air-India. Today, his flight is ready for takeoff. The chairman and managing director has beaten the gremlins and the Maharajah’s treasury is finally showing a surplus. Brand new Boeings have been ordered and profits are on the uptick: Air-India notched up $22m in 2004-05. Also, one of his key demands, that Air-India and domestic carrier Indian be merged, has been given the green signal and in line with the global trend of airline mergers, the Centre is planning to bring both carriers together to create a giant airline that could take on rivals like Singapore Airlines and Emirates.

EASY LANDING

Thulasidas feels the rough patch is over

 

The merged entity will be in a position to take on competition in the domestic market from private players. According to Thulasidas, the merger would be beneficial to his airline because A-I does not have a base at home. The proposed merger will create the country’s largest carrier with nearly 130 aircraft and a significant share in the global market.

But it won’t be a smooth flight all the way, to be sure. The government’s decision to allow Jet Airways and Air Sahara to fly internationally has brought Air-India in a direct face-off with domestic carriers in the overseas market. That, however, does not faze Thulasidas. In an interview with a leading daily recently, he said, “We at Air-India look forward to the competition. Air-India enjoys a very high level of loyalty of the Indian diaspora, which will stand in good stead for us.” 

Foreseeing the tough competition, the Air-India chief, told employees, “A-I will soon come up with a strong marketing strategy to face the competition” 

The highly competitive Jet Airways and Air Sahara have always followed aggressive planning and marketing strategy. Their foray into the international market would mean Air-India adapting marketing strategy that yields fruitful results. “Air-India will also spread its wings and will soon come up with a strong marketing strategy. It cannot lag behind as growth is the key to success, so Air-India may increase its pitch to advertise to keep up with its competitors,” Thulasidas said.

To maintain good standards, Air-India is planning aggressive growth in its fleet and upgrade of the existing aircraft. It has invested Rs 4 billion for revamping the interiors of aircraft, which includes luxurious seats for all classes, more luggage space and personal entertainment sets. “The aircraft we are now taking on lease come with state-of-the-art facilities. The passengers will find Air-India’s flights to be increasingly comfortable in the days to come,” he said.

To cope with the increase in number of customers flying internationally, Air-India has increased its flights substantially to major destinations. It has plans to boost operations in the US by increasing the frequency of flights and connecting new destinations over the next few months. 

Whether the expensive combination of new aircraft, revamped planes and new routes will do the magic for the Maharajah is something that not even Thulasidas can answer. We advise you to watch this space.

June 2006

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